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Interactive Investor eyes IPO after retail investing boom

Interactive Investor eyes IPO after retail investing boom

Interactive Investor, the UK’s second largest direct-to-consumer investment platform, is exploring an initial public offering this year, according to reports.

According to FTAdviser’s sister publication the Financial Times, the business is looking at an IPO on the back of a “boom in retail investing”.

Last week Hargreaves Lansdown said it was predicting profits above expectations due to a surge in share dealing during lockdown.

Many retail investment platforms have done well during coronavirus pandemic, as rookie users have turned trading in shares to pass the time.

Richard Wilson, chief executive of Interactive Investor, told the Financial Times that the company is "looking at the various options" and that a "natural outcome for a firm like us, as a kind of a consumer-facing retail firm, would be [an] IPO”.

Wilson said an IPO was not the only option being considered and that it was "about timing, but that's certainly something that we will be looking at".

A spate of acquisitions has seen Interactive Investor grow from £3.5bn in assets under management in 2016 to £50bn in assets this year.

The FT reported it now accounts for a fifth of the retail investment platform market, second only to Hargreaves Lansdown.

Last month, Wilson joined his counterparts at Hargreaves Lansdown and AJ Bell to call for a consultation into IPOs, saying retail investors should be given fair access to public offerings.

The chief executives sent an open letter to John Glen, economic secretary to the Treasury and city minister, saying retail investors were a growing market but were "excluded from the majority of IPOs via the LSE".

They wrote: "For too long UK listings have been the preserve of financial institutions and we urge you to consider the rights of retail shareholders in relation to IPOs."

The letter noted that between October 2017 and October 2020, private investors were invited to take part in just 24 out of 352 IPOs on the main market and Aim, only 7 per cent of all share launches.

In addition, a recent survey by Interactive Investor found that 80 per cent of DIY investors felt that private investors should have access to all IPOs, and that it was unfair to exclude them.

The D2C platform had asked 2,008 website visitors on February 8 and 9 and found one in five respondents believed there was an IPO “bubble”.

Earlier this month, Interactive Investor bought the EQ direct-to-consumer retail customer book from Equiniti for £48.5m.

This deal is expected to increase the company’s UK platform market share with assets under administration to increase from £45bn to £50bn and customers numbers from 350,000 to 400,000. 

Interactive Investor completed the acquisition of TD Direct Investing in 2017, Alliance Trust Savings in 2019, and Share Centre in 2020. 

amy.austin@ft.com

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